The era has been brought on largely through the rising cost of health care, serving an aging population and the implementation of the Affordable Care Act, President Barack Obama’s 2010 overhaul of the health insurance industry.

How that law ends up affecting the industry will become more clear next year, when some of its major initiatives kick in. Hospitals will face many of the changes.

At the same time, Scripps Health must continue to budget for unfunded mandates at a time when government reimbursements are being reduced. One in particular is a California law requiring hospital systems to make sure that all facilities can withstand an earthquake by 2030. The law has been repeatedly delayed, but Van Gorder said Scripps must evaluate its long-term plans each year.

In the meantime, he oversees a hospital system that with 13,500 workers is San Diego’s second-largest nongovernment employer. The system has five hospitals on five campuses, and about 10 other clinics and facilities.

“I often describe our organization as a little bit like a city,” Van Gorder said. “There’s a job for everybody in health care. We have engineers, we have plumbers, we have carpenters, we have reporters, we have marketing experts, of course we have nurses and physical therapists, and we have gardeners.”

Van Gorder talked with the U-T about the business climate in the health care industry and some of the hospital system’s plans.

Affordable Care Act

Van Gorder said health care is the nation’s No. 1 expense, with a large part of that being paid by Medicare and Medicaid. But the reimbursements to Scripps for those patients are going to shrink by $52 million over the next five years, Van Gorder said. That’s going to make the health care system adjust how it operates, because it will have less money generated from hospitals in North County, which fund hospitals in South County, where fewer patients have insurance.

“It’s often said that the only industry that’s regulated more than health care is nuclear power, and I’m not convinced any longer that’s the case,” Van Gorder said. “After the ACA, I think we are the most heavily regulated industry there is now in the United States — a lot of requirements and mandates and costs.”

Van Gorder said each time new regulations are added, the health care system hires more experts to interpret them. The ACA is no exception, he said.

Economic downturns

Van Gorder said that health care may be recession-resistant, but it’s not recession proof. That’s because not all health care is an emergency, and government reimbursements are declining. Elective procedures can be put on hold as costs are shifted to beneficiaries, employers and others in co-pays or deductibles.